Brundle Ltd is a reseller of dried foods, which is a burgeoning market. The company requires funding to expand. With inflation expectations increasing rapidly, the owners wish to raise equity rather than debt. If the company were to raise a significant amount of equity from purely new sources, with all else staying the same as before, what would you expect would change for the company? Choose the most correct option below. The company's ... . a. EPS would increase, beta would increase and the current control would be diluted b. EPS would decrease, beta would increase and the current control would be consolidated c. EPS would decrease, beta would decrease and the current control would be diluted d. EPS would decrease, beta would decrease and the current control would be consolidated

Question 1.2 (3 marks) Rad Ltd supplies clothing products to retail outlets and has recently spun off its growing online operations into a separate company. The management and board of the company resolved to follow a strict residual approach to dividend pay-outs in the future, as limited growth is expected from the retail sector. In the current year, of which we are at the end, the company has generated a net profit (available to ordinary shareholders) of R30 000 000 and has 150 000 ordinary shares outstanding. The company expects capital requirements of R10 000 000 in the coming year. If the company raises half of its funds from debt, what pershare dividend would it pay this year? a.) R100 b.) R125 c.) R166 d.) R200

Question 1.3 (1 mark) Links Ltd, a logistics company, is considering buying a smaller competitor in the same industry. The competitor, Smartmove Ltd, has a current share price of R10. Links Ltd's shares trade at R50. Determine the exchange ratio based on market values and choose the nearest option below. a. 0.10 b. 0.20 c. 0.25 d. 5.00

Answer rating: 100% (QA)

Question 11 If Brundle Ltd raises a significant amount of equity from purely new sources the most co... View the full answer